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Tiêu đề International Strategy of Nissan in China
Tác giả Nguyễn Thị Minh Hoạt, Nguyễn Trí Hiếu, Nguyễn Phương Trang, Dương Phương Thảo
Trường học National Economics University
Chuyên ngành International Business
Thể loại Essay
Định dạng
Số trang 41
Dung lượng 8,18 MB

Cấu trúc

  • PART I: INTRODUCTION (4)
    • 1. Why Nissan is interesting? (4)
    • 2. Nissan’s history (5)
    • 3. Demographics (8)
      • 3.1 Gender Distribution (8)
      • 3.2 Age (8)
      • 3.3 Length Employment (9)
      • 3.4 Income Statement (10)
  • PART II: BUSINESS STRATEGY OF NISSAN (11)
    • 1. Penetration (11)
      • 1.1 Market screening (11)
      • 1.2 Final selection (12)
      • 1.3 Entry mode (12)
      • 3.1. General (14)
      • 3.2 China (15)
      • 3.3. How to control international subsidiaries (16)
    • 4. Human resources policy and management (20)
      • 4.1 Staffing policy (20)
      • 4.2 Recruitment policy (22)
      • 4.3 Learning and development (25)
      • 4.4 Remuneration and welfare (26)
      • 4.4 Advices for Foreign Businessman in Chinese market (32)
      • 4.5 Advices for Nissan in Chinese market (33)
    • 5. Turnover, expense, profit in the Chinese market and how to manage finance (33)
  • PART III: RECOMMENDATION (38)
    • I. Advices for Foreign Businessman in Chinese market (38)
      • 1. The power of guanxi (38)
      • 2. Narrow down the market (38)
      • 4. Hire local partners and learn from them (39)
    • II. Advices for Nissan in Chinese market (39)
      • 1. Aware of the Chinese business culture (39)
      • 2. Gaining market share (39)
      • 3. Demand for electric vehicles in the Chinese market (40)

Nội dung

INTRODUCTION

Why Nissan is interesting?

Nissan Motor Company, headquartered in Yokohama, Japan, is a prominent global automaker and ranks among the top ten largest automobile brands worldwide Renowned for its commitment to automotive innovation, Nissan has pioneered numerous advanced technologies and features that are integral to modern vehicles The brand offers a diverse range of options, including economy cars, SUVs, and electric vehicles (EVs), catering to a wide array of consumer needs.

Following are three interesting facts about the legendary car manufacturer a) NISSAN IS OVER 100 YEARS OLD

Nissan boasts over a century of automotive history, having launched its first vehicles under the Datsun brand in 1911 Datsun represents Nissan's original heritage car, marking the company's significant legacy in the auto industry.

The Datsun name has a rich history tied to Nissan, originating from Kwaishinsha Jidosha Kojo, which was established in 1911 This company initially focused on manufacturing cars for the Japanese market while also aiming to expand its reach through exports.

In 1914, the Kwaishinsha company completed a compact 2-cylinder, 10-horsepower car named DAT Following a merger with Jitsuyo Jidosha Co., Ltd., they established Dat Jidosha Seizo Co., which later produced military vehicles In 1931, the company introduced a new 500cc, 10ps passenger car, which was smaller than the original DAT and was named DATSON, meaning "son of DAT."

However, in Japanese, the term son refers to “loss” therefore the band name was changed to “SUN” when the car went on sale in 1932.

In 1934, DAT Automobile Co and Jitsuyo Automobile Co merged to form what is now known as Nissan Instead of branding their vehicles as Nissan, the companies chose the familiar name Datsun for their cars The Datsun brand was officially retired in 1986, but Nissan revived it in 2013 for a line of low-cost vehicles, which was ultimately discontinued in 2020.

Since its inception, the automotive giant entered diverse engineering markets, partnered with different companies and competed in a few car races. b) NISSAN IS TO JAPAN WHAT FORD IS TO USA

America was once the global leader in car production during the early decades of the automotive industry However, as the industry evolved, significant changes occurred that impacted this dominance.

Nissan, originally known as Nihon Sangyo Company Limited, emerged as a market leader by fulfilling the majority of Japan's automotive needs, similar to how Ford dominated the American car market.

In the early 20th century, Nissan expanded its brand after acquiring Datsun in 1932, introducing a diverse range of car bodies, including pickup trucks and convertibles Interestingly, Nissan also ventured into aerospace by building rocket engines.

Nissan, known primarily as an auto giant, also made significant contributions to the aerospace industry by designing and developing the Lambda 4S-5 spacecraft engines In 1970, the company successfully launched Japan's first satellite, OHSUMI, into space However, in 2020, Nissan decided to sell its aerospace division to concentrate solely on its automotive business.

Nissan’s history

1960-1969: PERFORMANCE BECOMES ONE WORD - DATSUN

Nissan Motor Corporation in the U.S.A was founded in Gardena, California, where it launched the SPL 201, Datsun's inaugural sports car featuring a 4-seat design, a fold-down soft-top, and a "4 on the floor" transmission with a 48-hp engine, later upgraded to 85 hp In 1966, Nissan Mexicana became the first Japanese-owned production facility in North America, marking a significant milestone by manufacturing its first vehicle.

By the end of the 1960s, Nissan established a solid reputation in both the American and Japanese automotive markets The iconic 240Z was introduced to the U.S in 1969, making its debut at the Pierre Hotel in New York, where it quickly garnered acclaim from both media and car enthusiasts.

1970-1979: PUSHING THE LIMITS OF DATSUN BUILDING A SOLID REPUTATION

The 70s were a great decade for Nissan Nissan sold the one-millionth Datsun and became the top vehicle importer in the United States by 1975.

In 1971, Nissan achieved a significant milestone with annual sales surpassing 250,000 units in the United States for the first time The brand made a strong impression in motorsports, with the iconic Datsun 510 and 240Z winning prestigious titles, including the SCCA Trans Am 2.5 Championship, the American Rally Championship, and the challenging East African Safari By 1973, Nissan celebrated the sale of its 1-millionth vehicle in America, solidifying its presence in the automotive market.

In 1975, Datsun became the top U.S vehicle importer. h

In 1979, Nissan Design America (NDA) was established in La Jolla, California, with a mandate to bring American style and concepts to Nissan vehicles.

1980-1989: FINDING OUR STRIDE, BUILDING ON RACING LEGENDS

In the 1980s, Nissan capitalized on its achievements from the 1970s, enhancing its brand identity in both the automotive market and motorsports Additionally, Nissan made a significant milestone by producing its first truck in the United States.

In 1980, Nissan Motor Manufacturing Corporation (NMMC) was founded in Smyrna, Tennessee, to meet the increasing demand for Nissan vehicles By 1989, the company celebrated the production of its 1-millionth vehicle in the United States and launched the Summer Institute for Historically Black Colleges and Universities.

Nissan demonstrates its agility by retaining the Nissan heritage while moving in new directions.

In 1991, Nissan earned its inaugural environmental award from the EPA, marking a significant advancement in green technology The company contributed to a California testing program by providing its Alternative Fuel Vehicle and unveiled the innovative Future Electric Vehicle concept car.

In 1997, Nissan received the prestigious "Best of the Best" award from the Environmental Protection Agency, while its Smyrna plant was recognized as the most productive facility in North America for the fourth consecutive year according to "The Harbour Report."

Nissan has significantly expanded its model lineup, nearly doubling both the number of vehicles offered and its sales over the past decade This growth includes the introduction of Nissan's first full-sized truck, innovative hybrid technology, and a cutting-edge supercar for the 21st century, marking just the beginning of an exciting future for the brand.

The first full-size Nissan truck, the TITAN®, debuted in 2003 as a 2004 model. Today, the V8-powered pickup is available with a King Cab or a Crew Cab In

2007, Next-generation technology thrived with Maxima, Altima, Sentra, Quest, Versa Hatchback and Versa Sedan.

2010-2020: THE DAWN OF NISSAN ELECTRIFICATION

Nissan has been a pioneer in the electric vehicle market, introducing the all-electric Nissan LEAF® and continuing to innovate with new models such as the Nissan Kicks The brand also emphasizes safety with its advanced Safety Shield® 360 suite of features, showcasing its commitment to leading the automotive industry into a new era.

International business 2 Đại học Kinh tế Quốc dân

Chương 1 Phân tích cơ hội kinh doanh quốc tế

Tata-Motors-SC2122 - Very good

2021-PRESENT: A NEW ERA OF THRILL

Nissan's rich history of over 90 years is just the beginning, as the brand embraces electrification and innovative services like Nissan@Home The latest developments showcase Nissan's commitment to enhancing capabilities across its trucks, SUVs, and sports cars, marking an exciting new chapter for the company.

Demographics

 Nissan is a male-dominated company 67% of Nissan employees are male and 33% of Nissan employees are female.

 The most common age range of Nissan employees is 20-30 years 54% of Nissan employees are between the ages of 20-30 years.

 The least common age range of Nissan employees is less than 18 years 1% of Nissan employees are between the ages of less than 18 years. h

 A plurality of employees at Nissan stay for 1-2 years 30% of Nissan employees stay at the company for 1-2 years.

 It's rare for an employee to stay with Nissan for 8-10 years Only 7% of

Nissan employees stay at the company for 8-10 years. h

Global production surged by 9.0 percent year-on-year, reaching 909,000 units in the final quarter, reflecting a significant acceleration from the 2.4 percent increase to 2.526 million units in the first nine months of the fiscal year However, year-on-year unit sales experienced a decline of 6.9 percent, totaling 842,000 units in the third quarter, with retail sales showing considerable variation across different regions worldwide.

Net revenue rose by 1.35 trillion yen year-on-year, reaching 7.50 trillion yen, driven by improved revenue per unit and a weaker yen, despite a decline in sales volume Operating profit increased by 98.4 billion yen to 289.7 billion yen, achieving an operating margin of 3.9% For the nine-month period, net income stood at 115.0 billion yen, reflecting a decrease from the previous year mainly due to one-time factors related to the sale of Daimler shares and the exit from the Russian market However, for the three-month period, net income saw a significant increase compared to the previous year, even after accounting for an extraordinary loss from the exit in Russia.

BUSINESS STRATEGY OF NISSAN

Penetration

Nissan's remarkable success in China can be attributed to its strategic product planning, early market entry, and, most importantly, its political acumen This achievement serves as a valuable blueprint for foreign brands aiming to tap into China's expanding middle-class market, which boasts the largest middle class globally and nearly 400 million millennials poised to shape the future of mobility in the country.

China's low labor costs make it an attractive option for many reputable companies seeking to hire employees This allows businesses to access experienced labor at a fraction of the cost compared to other countries.

China has a high GDP Thus, the purchasing power of the people of the country is also significantly higher Therefore, Nissan found a good market in China.

Political tensions between Japan and China are no longer negatively impacting sales for Japanese automakers As demand in the world's largest auto market continues to grow, the Japanese automaker is contemplating further capacity expansion in China.

Nissan's chief planning officer, Andy Palmer, noted a decline in Japanese car sales in China due to escalating tensions over a territorial dispute Despite this setback, he emphasized that Nissan remains the largest Japanese manufacturer in the Chinese market and is committed to maintaining that status.

China's vast population, with nearly 90% literacy, provides businesses access to a skilled workforce at competitive wages This large pool of educated labor contributes significantly to the country's low labor costs, making it an attractive destination for companies seeking expert employees.

The evolving lifestyle of the Chinese population is significantly influencing their preferences and choices With urban living becoming more prevalent across the country, businesses are observing shifts in social behaviors and purchasing trends.

China's automotive market is highly competitive, featuring numerous local and international brands, including prominent competitors of Nissan Motors such as Ford, Toyota, and Volkswagen Nissan's SUVs have gained significant popularity in Asian markets, contributing to its success Additionally, the brand is focusing on the development of electric vehicles and advancements in automated driving technology, further enhancing its position in the region.

1.2Final selection : Nissan has taken a visit to China to find out this market and cooperate with local factories and companies to expand its activities in China. Nissan looks forward to growing with this critical market for the long term

Nissan places significant importance on the Chinese market, having established a presence in 1993 with the formation of Nissan (China) Investment Co., Ltd and a major joint venture with Dongfeng Motor Company Limited, the largest auto joint venture in China The company operates several brands, including Nissan and Infiniti, through its joint ventures Dongfeng Nissan Passenger Vehicle Company and Zhengzhou Nissan Automobile Co., Ltd., along with its independent subsidiary, Dongfeng Infiniti Automobile Co., Ltd.

Nissan employs an equity-based entry strategy through joint ventures and wholly-owned subsidiaries, exemplified by the establishment of Nissan (China) Investment Co., Ltd in February 2004 This wholly-owned subsidiary, with nearly 300 employees, serves as Nissan's headquarters in China It focuses on various key activities, including the export of parts and components, environmental and safety technology certification, technical trend analysis, intellectual property protection, global model design for Nissan and Infiniti vehicles, as well as corporate public relations, external affairs, and corporate social responsibility initiatives in China.

Nissan is focused on becoming a market leader in its high-priority countries by implementing global strategies that emphasize direct technology transfer through partnerships with foreign automakers from Britain, America, and Germany This approach facilitates rapid technology adoption, allowing Nissan's vehicles to compete effectively with advanced competitors However, the reliance on emerging technologies poses risks, as some innovations are untested and can lead to increased costs if they fail.

Nissan employs a transnational strategy that balances cost reduction with product localization, evolving from a model where knowledge flowed primarily from Japan to a more interconnected system where insights are shared globally among all locations The company adapts successful strategies from one market to another, as seen when it entered China by leveraging methods used in Japan and Taiwan Additionally, Nissan formed alliances with local companies, such as Ashok Leyland in India and Dongfeng Motors in China, to offer a comprehensive range of passenger and commercial vehicles This approach highlights Nissan's commitment to a globally focused yet regionally concentrated strategy.

Nissan employs best practices globally while tailoring products to meet local consumer needs, exemplified by the Livina Geniss, designed exclusively for China Each country operates as an independent Strategic Business Unit (SBU), yet they are integrated to minimize duplication and reduce costs The company values alliances for growth in the competitive global auto industry, forming partnerships with firms like Renault, Daimler, and Mazda, which cover over 73% of its global market Notably, the USA is the sole market where Nissan operates independently The primary motivation behind these alliances is to gain insights into local markets and share technical and management expertise.

The Nissan Group seeks to harmonize regional and global functions through its organizational structure Four management committees oversee regional operations in Japan, the Americas, Europe, and General Overseas Markets, while functional departments like research, development, purchasing, and production focus on global coordination By employing a cross-organizational strategy, Nissan's Global Headquarters enhances both regional and functional activities, ensuring effective management of global operations.

 Governance Framework: Guided by the corporate governance & internal control strategy of Nissan Global Headquarters, NCIC lists information security, risk management and compliance management as its three focuses.

To enhance its compliance management system, NCIC established a structured three-tier framework consisting of a Management Committee and specialized Information Security, Risk Management, and Compliance Management Committees, all overseen by a Management Office This framework ensures that all corporate activities adhere to compliance standards, with all responsible individuals holding positions at the vice-president level or higher within the Management Committee.

Human resources policy and management

Historically, Japanese companies have adopted an ethnocentric staffing approach, favoring expatriate Japanese managers to lead their international operations This preference stems from the belief that these managers are deeply ingrained in the company’s culture, ensuring consistency and alignment with corporate values.

Nissan's board includes six non-Japanese members, indicating a geocentric staffing policy aimed at sourcing the best talent for key positions, irrespective of nationality This approach offers several advantages, such as optimizing human resource utilization and fostering a diverse pool of international executives Ultimately, this strategy is essential for cultivating a cohesive corporate culture and a robust management network within the organization.

In fiscal year 2021, the total number of employees in Nissan Motor Corporation was 134,111- a slight increase compared to 2020

The recruitment process includes several key stages: an online application, an agility test, a line trial, and an interview Candidates who successfully navigate these steps will undergo a medical examination before receiving a job offer This thorough process assesses various skills and abilities to ensure a well-rounded evaluation of each applicant.

Candidates must demonstrate flexibility by being available for paid overtime on short notice, including weekends, and should be willing to transition between departments as necessary The ability to quickly learn new tasks and skills is essential for success in this role.

Adapting quickly to a new environment and understanding the role is crucial for success Candidates must be flexible in adjusting to frequently changing processes and procedures while also being receptive to new training methods.

Candidates must demonstrate the ability to thrive in high-pressure environments, meet tight deadlines, adhere to specific instructions, and effectively manage their time in response to unexpected challenges.

You will need to start your shift on time and be able to complete your shift to the best of your ability

Candidates will need to take pride in quality and ensure their work meets specific standards and follow quality processes to ensure effective benchmarking.

Candidates will be placed in a team of around 20-30 fellow manufacturing employees and will work together in a team to achieve objectives set by the business.

Diversity and inclusion are considered the strength of the company, helping Nissan to adapt to the changes in the business environment.

The company has constructed a framework to promote diversity and inclusion worldwide with collaboration among the corporate organization and each region. Global Diversity and Inclusion Council

 Chaired by CEO with representing respective divisions and regions as members

 Makes decisions on diversity and inclusion policies and direction of initiatives globally.

Regional Diversity and Inclusion Council

 Organizations set up in each regions to promote diversity and inclusion

 Chaired by respective senior management of each region, with executives representing each divisions as members

 Establish a structure to execute the initiatives as corporate actions as well as structure to handle various diversity and inclusion issues that differ by region. h

 Continually improving human resources systems

Nissan is committed to enhancing its human resources systems to foster long-term growth for both its employees and the organization The company has implemented three key appraisal pillars, which include metrics derived from the evolved NISSAN WAY and a focus on People & Collaborative Leadership These initiatives aim to boost employee motivation, encourage self-development, and strengthen teamwork and expertise.

 Support for self-designed careers

Nissan prioritizes employee development by fostering a supportive work environment where individuals can create their own schedules The company emphasizes continuous learning, encouraging staff to advance their careers while gaining practical experience Through a comprehensive human resource management policy, Nissan facilitates personal growth by enabling biannual meetings between employees and supervisors to review progress, identify areas for improvement, and implement necessary changes swiftly.

Nissan views its employees as the company's most valuable asset, emphasizing the importance of their development To support this, the company has implemented a range of programs aimed at enhancing management, business, and leadership skills These initiatives empower employees to expand their knowledge and mindset, enabling them to achieve their career aspirations.

Nissan Learning Center was established to cultivate skilled leaders essential for monozukuri, ensuring the transfer of technologies and expertise to future generations The center provides diverse programs focused on enhancing the capabilities of engineers and technicians, fostering innovation and excellence in the industry.

“Nissan DNA” and achieve continuous success through the implementation of the evolved NISSAN WAY

 Engineering and Technical Skill training around the world

To strengthen their efforts to expand the business globally, Nissan must further improve the engineering skills of individual employees working across the globe.

Since its inception in 2012, Nissan's Global Training Program (GTP) has established a standardized training initiative across its R&D sites globally, focusing on key areas such as electric vehicles, autonomous driving technologies, and connected car services.

To enhance the daily management skills of foremen and general foremen across all Nissan, Renault, and Mitsubishi plants globally, a standardized production approach called the Alliance Production Way (APW) has been established.

The evaluation-based remuneration system used to appropriately evaluate employee contributions to the company is structured in the way that motivates them to set and achieve high goals h

An employee’s salary is determined through a combination of performance evaluations measuring to what extent the employee achieved certain goals and competency evaluations measuring skills, knowledge and attitude

 Respecting the rights of workers:

Nissan is committed to creating a people-centered corporate culture that prioritizes employee well-being By fostering a supportive workplace environment, the company ensures that human rights are respected across the organization To systematically address these important issues, Nissan is developing a robust framework that promotes peace of mind for all employees.

In 2021, Nissan introduced the "Nissan Global Guideline on Human Rights," outlining specific actions to uphold employees' human rights This comprehensive document addresses seven key themes relevant to Nissan's operations: labor management systems and access to remedy, forced labor, child labor and young workers, working conditions, discrimination, freedom of association, and health and safety.

To thrive amidst rapid social and business changes, companies must ensure employees embrace the corporate purpose and mission, actively working towards them Nissan has implemented two key communication principles: "building trust" and "increasing employee motivation," to enhance engagement By leveraging diverse communication tools, Nissan deepens employees' understanding of the business, products, and brand direction, fostering confidence in their daily roles and the company's future.

Turnover, expense, profit in the Chinese market and how to manage finance

In China, retail sales were down 6.9 percent to 292,000 units in the third quarter as the COVID lockdown continued to impact customer traffic.

Unit sales were negatively impacted by three main issues: h

 - Firstly, the ongoing disruption in China caused by COVID-19,

 - Second, shortages of semiconductors in the US for compact segment models

 - Third, vehicle exports hampered by constraints in global logistics.

Nissan is making significant strides with its Nissan NEXT business transformation plan, a four-year initiative aimed at achieving sustainable growth and financial stability by March 2023 This progress is reflected in the increasing net revenue per unit for major models, driven by enhanced sales quality and cost optimization efforts Additionally, financial discipline and strict fixed cost control, along with the favorable effects of yen depreciation, have led to a notable performance improvement compared to the previous fiscal year.

In the latest reporting period, our net revenues rose to 7.50 trillion yen, up from 6.15 trillion yen in the previous year, reflecting significant growth on an equity basis, excluding contributions from our China joint venture operations.

On the same basis, operating profit for the period was 289.7 billion yen, with an operating margin of 3.9 percent Nissan’s automotive profit is also positive for the nine-month period.

During the nine-month period, the company reported a net income of 115.0 billion yen, with the automotive business generating a positive free cash flow of 21.0 billion yen The positive cash flow in the second and third quarters effectively offset the negative cash flow experienced in the first quarter, which was attributed to low production levels.

In the nine-month period, net revenue increased to 8.45 trillion yen, up from 7.11 trillion yen last year, including our operations in China Operating profit for the same period was 375.2 billion yen, reflecting an operating margin of 4.4 percent.

Despite the China joint venture generating positive free cash flow, the automotive sector reported a negative free cash flow of 32.2 billion yen for the nine-month period This decline is attributed to the exclusion of dividend payments from the China joint venture to Nissan in the proportionate free cash flow calculations.

Net cash for the automotive business reached 1.57 trillion yen on this basis. h

The Finance and Accounting Department centrally manages the Group's financial activities, focusing on enhancing cash efficiency through the implementation of a global cash management system.

The Group has established a foundational financial strategy that focuses on sourcing funds effectively while ensuring adequate liquidity and a robust financial standing This approach enables timely investments in research and development, capital expenditures, and its financial operations.

The Group strategically manages its investments in research and development, as well as capital expenditures, maintaining a consistent ratio to annual sales By concentrating resources on core markets, models, and technologies, the Group enhances its operational focus Additionally, it prioritizes the quality of financial assets and invests in its sales finance sector Dividend distribution to shareholders is determined by evaluating multiple factors, including profits and available free cash flows.

For an automotive business, maintaining sufficient liquidity is essential to meet the working capital requirements for daily operations, support ongoing research and development, fund future expansion through capital investments, and manage the repayment of maturing debt This liquidity can be achieved through a combination of cash and cash equivalents, generating internal cash flow, and seeking external funding sources.

Nissan's liquidity risk management policy aims to maintain sufficient liquidity while mitigating risks associated with debt maturities The policy outlines minimum liquidity requirements based on factors such as debt maturity, mandatory payments like dividends and taxes, and peak operating cash needs Additionally, Nissan benchmarks its liquidity targets against major Japanese corporations and global automotive companies to ensure the assumptions are sound.

Nissan faces multiple financial market risks, including foreign exchange fluctuations, interest rate changes, and commodity price volatility While it cannot completely eliminate these risks through derivative products, the company strategically hedges certain currencies and commodity price risks to mitigate financial market exposure.

Nissan faces various foreign currency exposures that result from the currency of purchasing cost being different from the currency of sale to customers.

Nissan is actively minimizing foreign exchange risk by reducing its exposure to foreign currencies This strategy includes relocating production facilities to the countries where vehicles are sold and sourcing raw materials and parts in local currencies.

Nissan aims to mitigate risks associated with foreign exchange volatility in the short term by utilizing derivative products, adhering to its internal risk management policies and operational guidelines for derivative transactions.

The interest rate risk-management policy focuses on two key principles: financing long-term investments and the permanent portion of working capital with fixed interest rates, while utilizing floating rates for the nonpermanent portion of working capital and liquidity reserves.

Nissan may hedge risks of interest rate fluctuation by using derivative products in accordance with the internal policies and procedures for risk management and operational rules regarding derivative transactions.

Nissan sources raw materials through both supplier-provided parts and direct purchases, which exposes the company to price fluctuation risks associated with these raw materials, regardless of the procurement method.

RECOMMENDATION

Advices for Foreign Businessman in Chinese market

Guanxi, a fundamental concept in Chinese culture, translates to "relationships" and emphasizes the significance of cultivating a robust network within the business community In China, personal relationships formed outside of formal business settings are highly valued, requiring considerable patience and dedication to develop Once guanxi is established, it fosters personal trust and creates pathways to potential business opportunities.

Western leaders often prefer to dive straight into business discussions, showing limited interest in small talk In contrast, Chinese business partnerships are typically long-lasting and founded on carefully nurtured relationships built on trust This approach fosters deep mutual respect, which develops over time, ultimately strengthening the essential interpersonal connections that drive commerce.

When entering the Chinese market, it's advisable to focus on a specific region or major city rather than targeting the entire country due to its vast population Begin by evaluating the benefits and risks associated with different regions, considering factors such as market potential—including the size of potential markets, GDP growth, and demand for your product or service Additionally, assess risk factors like your team's expertise in the market, the ease of doing business, and applicable tariff rates This analysis will yield measurable data to help you refine your list of potential markets effectively.

One option is to target a more developed area as a way to get to know the country.

An example is Hong Kong, with its sophisticated infrastructure, duty-free port, abundance of suppliers and concentrated large population.

4 Hire local partners and learn from them.

Expanding into foreign markets, particularly China, significantly increases your chances of success when you collaborate with local partners These experts can help navigate the complex cultural and logistical challenges that often arise, especially given the common misconceptions held by many Western observers about China's unique values and systems.

Advices for Nissan in Chinese market

Nissan views China as a crucial market, particularly in light of recent challenges, including a boardroom scandal involving Carlos Ghosn and a decline in sales that jeopardizes its partnership with Renault As the company seeks to stabilize its position, focusing on strategies in China has become essential for its recovery.

1 Aware of the Chinese business culture

Like we have mentioned, Chinese culture still places a high value on the collective.

As a Western business leader, it is crucial to recognize the differing perceptions of value held by your Chinese partners and customers While Western individualism is gradually making its way into Chinese culture, many individuals still prioritize societal, familial, or organizational obligations over personal achievements or desires.

In the competitive landscape of ride-sharing, autonomous driving, and connected vehicles, securing market share in China is vital for automakers' future growth Nissan faces intense pressure from rivals like Toyota and Honda, who consistently launch new models in the Chinese market To avoid falling behind, Nissan must prioritize the timely introduction of innovative vehicles, as any delay could significantly weaken its competitive stance.

3 Demand for electric vehicles in the Chinese market.

Nissan, a pioneer in electric vehicles with its popular Leaf, has lagged behind competitors Toyota and Honda, according to analysts Both companies introduced a range of new hybrids in China during 2019 and 2020, significantly increasing their sales Additionally, the rise of local brands producing higher-quality cars is intensifying competition for Nissan's mainstream models and those from other global automakers.

Nissan needs a comprehensive strategy to enhance its presence in the electric vehicle market, emphasizing advanced features to stay competitive in China Additionally, the plan should prioritize the use of locally sourced components and technologies, which will lower costs and enable Nissan to better compete with both affordable Chinese manufacturers and major global competitors.

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